Figure 34-6

question 115

Multiple Choice

Figure 34-6.On the left-hand graph,MS represents the supply of money and MD represents the demand for money;on the right-hand graph,AD represents aggregate demand.The usual quantities are measured along the axes of both graphs.
-Refer to Figure 34-6.Suppose the multiplier is 5 and the government increases its purchases by $15 billion.Also,suppose the AD curve would shift from AD₁ to AD₂ if there were no crowding out;the AD curve actually shifts from AD₁ to AD₃ with crowding out.Also,suppose the horizontal distance between the curves AD₁ and AD₃ is $55 billion.The extent of crowding out,for any particular level of the price level,is

• A)$75 billion.
• B)$40 billion.
• C)$30 billion.
• D)$20 billion.

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Definitions:

Recognize Emotions

The ability to identify and understand one's own feelings and the feelings of others.

Initial Goal

The first objective set in a project, treatment, or endeavor, serving as the starting point for progress.

Self-disclosure

The act of sharing personal, private, or sensitive information about oneself with others, which can enhance closeness and trust in relationships.

Primary Purpose

The main goal or objective that an activity or endeavor is intended to achieve.